Harris Associates, one of the major stakeholders of the Swiss bank Credit Suisse, has sold its entire stake in the Swiss bank over the past few months. The news was announced on Sunday by David Harro who is the deputy chairman and chief investment officer of the firm.
While the news was confirmed by Harro, he did not mention any particular reason for the decision by the firm.
Earlier in a report by the Financial Times, the agency reported that Herro planned to sell his stock after losing his patience over Credit Suisse’s delayed action in losing a large amount as loss for a long time and also for the loss of multiple customers in the recent past.
The recent past of the Swiss bank Credit Suisse has not been easy. Reports suggest that the firm lost almost 1.7 billion Swiss francs in 2021 and the loss followed through 2022, which increased to a massive 7.3 billion Swiss francs.
Harris Associates was a loyal shareholder and remained with the firm amidst their losses. Harris revealed that the company had almost a 10% stake in Credit Suisse in August last year, but it reduced considerably to 5% in January.
The news about Harris Associates earning their shares in Credit Suisse was first reported by the Financial Times. According to their report, Harris Associates started to cut their exposure last October, They cite two reasons as the immediate events that accelerated the actions.
One was Credit Suisse’s fundraising, where the bank raised almost $4.3 billion from their investors and another was the supplantation of the Saudi National bank as one of their top investors by Credit Suisse. According to the latest reports the Saudi National Bank is the largest shareholder in Credit Suisse.
The report that appeared in Financial Times also shares the concern shown by Harris Associates in the future of the franchise.
Harris Associates points to the large withdrawal the bank has had in recent times. They also mention the fact that the bank had quite large withdrawals in their fourth quarter which has resulted in the outflow of almost 110 billion Swiss fences.
While Harris Associates is concerned about the future of the bank, Credit Suisse has said that they are quite confident in their future. The company has stated that they are ahead of its plans and that they have clear objectives for the company’s future.
Even though Harris Associates have ended their ties with Credit Suisse, the firm still holds shares in major different companies in Europe like Lloyds Banking Group, Intesa Sanpaolo, German insurer Allianz, BNP Paribas, and Julius Baer.
David Herro, who is the deputy chairman and the chief investment officer of the firm does not believe that the radical destruction that took place at Credit Suisse will be able to balance out the management of the bank and help it achieve its lost value.
Harris Associated first engaged with Credit Suisse way back in 2002. During that time, the stock of Credit Suisse was priced at less than 30 Swiss francs. With the financial crisis that hit in 2008, Harris Associates sold all their shares for a price between 60 Swiss francs and 70 Swiss francs.
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After the effect of the financial crisis, the stock price of Credit Suisse’s stock fell drastically to almost 23 Swiss francs, when the company decided to buy back its shares.
The shares of Credit Suisse showed a rise in the initial stage which brought its value up to 56 Swiss Francs but from there on, the stock had been on a steady decline.
Before selling all of their shares in the Swiss bank Credit Suisse, Harris Associates was one of the major shareholders of the bank. As Harris Associates have sold all their stock in the com[nay now, the major shareholders of the bank are Saudi National Bank and Qatar Investment Authority.
The Saudi National Bank bought almost 10 percent of the stock in the company during the capital raising last year. Around the same time, the Qatar Investment Authority also raised its shares to around 7 percent.
Not only Harris Associates, but some of the other shareholders of the bank have also reduced or completely sold off their stock in recent times. Dodge & Cox, which is an asset manager based in San Francisco, has also reduced their holding in the company.
Dodge & Cox used to hold around 5.11 percent of the shares in the company by 2020 but they have reduced their holding to almost 3.1 percent currently.
Just like Harris Associates, Artisan Partners has also completely sold out their shares in the company over the last six months. Artisan Partners was one of the top five shareholders of Credit Suisse last year.
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